UPDATED: WTF? Digital Media Association and MLC Vendor ConsenSys Share DC Address

UPDATE!!!! I’ve indirectly heard from DiMA and I am embarrassed to admit that they share the same space cause this is a We-Work co-working space! There are dozens of businesses at this address. DiMA flat out deny they had anything to do with the selection of ConsenSys. Apparently they had no idea ConsenSys shares their address. I take them at their word, so should you.

Frankly I’m kind of impressed DiMA isn’t wasting money on fancy offices. They are down in the trenches rubbing elbows with farm co-op lobbyists and CBD-blockchain-startups. Good for them.

Now if we could only find a co-working space with marble parking garages we might be able to get the MLC to consider a co-working space and save all songwriters a little money.

Sadly, now we are left with the fact it was our side that picked ConsenSys.

Keep this correction in mind as you read the original article. The point of the article is that there appears to have been little due diligence on ConsenSys by MLC.

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Honest.  I’m not making this up. Look at screenshots above.

The Digital Media Association (DiMA) represents digital services. You know Google, Spotify, Youtube, Pandora etc. DiMA are on THE OTHER SIDE.  I’m sure some of these folks are good people. At least a couple. Or at least one.  But these are the people the Music Licensing Collective are supposed to be negotiating against on behalf of songwriters. Why did the MLC hire as a vendor a company that apparently is in the same building as the Digital Media Association?

Even if there is no actual funny business, it looks extraordinarily bad. It makes it look like DiMA is picking the MLC vendors. Surely that’s not what this tweet really means!

Lets review.  It’s been less than a week since the MLC announced ConsenSys and HFA as vendors. What we know so far about ConsenSys:

National Security Investigation

The owner Joseph Lubin is one of the co-founders of the Ethereum Foundation a sort of governing body for the cryptocurrency Ethereum.  The chief researcher for the Ethereum foundation was just arrested for allegedly conspiring with North Korea to launder money using cryptocurrency.  Some might say that the Ethereum Foundation and ConsenSys are separate companies.  Sure they are separate companies in the same way the Genco Pura Olive Oil Company was separate from Vito Corleone’s other businesses.  And yes I know I’m implying there is a whiff of organized crime around all of this. Ethereum Foundation also shares a Zug Switzerland address with ConsenSys. Let’s see… crime? Check. Closely related entities working in concert? Check.

Asteroid Mining

ConsenSys counts an Asteroid Mining company as one of its subsidiaries, or “spokes” as ConsenSys prefers to call them. That’s probably because many of these “spokes” do not appear to be legally registered companies of any kind (LLC, INC, S-Corp, LLP, GP etc).

Employee Shares

ConsenSys seems to be having some trouble paying out promised shares to employees. Can an(other) SEC investigation be far off?

Planetary Ore Network Zenith Inc

Forbes came about as close as they could to calling ConsenSys a Ponzi scheme without actually using the word. Regardless of whether it is or not, without any real money-making businesses among its “spokes”, it’s possible it will collapse before it ever does the job the MLC hired it to do.

Songwriters should be alarmed. I mean like the-fucking-house-is-on-fire alarmed. Especially those independent songwriters that rely on mechanical royalties rather than performance royalties. The two vendors the MLC have hired HFA and ConsenSys are deeply troubling choices. When Jan 2021 rolls around I’m skeptical there will be a functioning MLC to pay out the mechanicals. If you are an independent writer and you have a mortgage? I’d be very concerned.

 

RICO SUAVE: A Layman’s Argument For A Law Enforcement Investigation of TikTok

Maybe I shouldn’t say this is an “argument.” This is a plea. A rant. A tirade. A demand that our government enforce the rules and laws enacted by our elected representatives.

The last twenty years has been one venture-funded digital music “service” asshole after another ripping off songwriters and musicians with the same bullshit promise of “empowering” artists. It was bullshit before there was an “@” or “.com” attached to the swindle.  And it still is a swindle. I’m pleading for someone in law enforcement to actually do their job. I’m not an attorney but when I read the applicable state and federal laws it is profoundly clear that most of these mass copyright infringing “services” are engaged in organized criminal activity. Yet rarely is anything done. And by letting them get away with it, time after time, year after year, law enforcement has essentially given the green light to the operators of these services to rip us off. Our only recourse is to resort to civil actions. These take years to complete. When these cases are settled the “services” and executives end up paying out a pittance, a small sliver of the profits they pocketed. Then they do it all over again. The same fucking scumbags. Aided by the exact same attorneys, VCs, investment bankers, bought off academics, fake NGOs and (worst of all) artist managers and former label executives now on the payroll of Swindle-dot-com. It is a racket in both the common and legal sense of the word. And the facts are staring everyone in the face.

I swear give artists one good solid investigation and everything will change. Put one of these digital music fucks in jail. Clawback a single VC’s profits. Disbar a single attorney. Suspend a single SEC license. Revoke the tax-exempt status of a single fake NGO and i promise artists can finally stop clogging up the courts with endless civil copyright proceedings.

And may I humbly suggest we start with the TikTok?

TikTok is probably one of the most popular apps in the world.  The music-oriented short video app has been reportedly downloaded over a billion times.  If you’ve never heard of TikTok just ask your kids. TikTok is owned by an opaque Chinese company privately valued at $73 billion dollars. TikTok was recently embarrassed when a memo leaked that appeared to instruct moderators to censor content sensitive to the Chinese Government.  You know Tibet, Tiananmen Square, Uighur re-education camps you get the idea. The Washington Post also reports that Hong Kong protests are being censored on the platform.

Cute little TikTok app an instrument of Chinese state influence? Yeah all fun, games and Taylor Swift lip syncs until someone gets put in a re-education camp. Sorry to spoil the fun folks.

The Committee on Foreign Investment in the UNited States has finally started an investigation of the company for its handling of US citizens private data and the suppression of facts that are inconvenient to the Chinese Government. You know facts like Uighur concentration camps and the mere existence of Tibet.

But as bad as they are with suppressing inconvenient facts and privacy violations, they actually profit from IP theft.

What most people don’t realize is that TikTok lacks the most basic licenses for most of its content.  I’ve spent the last few weeks researching this.  Many of you know that I’ve been all over this on twitter with friends and strangers often pointing to new evidence or web documents that support my assertions. I could be wrong. But I don’t think so.  73 billion-dollar Chinese company with a stunning lack of licenses.  Mind-boggling. US creators are clearly being ripped off.

ARGUMENT THAT THE DMCA “SAFE HARBOR” DOES NOT APPLY

TikTok’s need for licenses and massive copyright infringement is clear.  And it is also clear they can not hide behind the DMCA.  I quote from my original post:

After a couple of hours playing around with app it appears:

1.TikTok makes available my work and then provides the copy to the user before the user makes any content.

2. The copy would seem to be more than “ephemeral” (an important copyright act legal distinction) as at certain stages I repeatedly accessed the content even when my device lacked internet connectivity.

3. TikTok app “marries” or “syncs” the music to audiovisual content provided by their service or uploaded by the user. Note this is after the recording and composition have apparently been copied and distributed to the user’s device. In other words, the infringement occurs before the user supposedly “publishes” content.

4. Before the “marrying” or “syncing” of the music to audiovisual content if I cut off internet connectivity. The process of marrying the video to music seems to fail. This suggests TikTok service requires sync license, not the user.

5. Only after all sync has occurred does the user have the option to “publish” the work. This is long after TikTok carried out many infringing activities.

As the conversation spilled over onto social media “new shit, came to light.” And perhaps the single most compelling new fact is that Distrokid, an indie distributor popular with DIY artists has a deal with TikTok so “Independent artists can now use DistroKid to get their music into TikTok.”  Good for them.  Distrokid is (of course) partially owned by Spotify.

What is important about this little fact, is it seems to confirm that there exist servers that belong to TikTok (or a contracting party); these servers store copies of recordings and songs on behalf of TikTok; and these recordings and songs are provided under a license to TikTok. Distrokid’s official statement (from the Founder/CEO nonetheless) is clear: “into TikTok.” Thus there is no UGC and DMCA “safe harbor” does not apply. Further, the existence of this license indicates that TikTok is aware they need licenses. As one attorney on twitter noted a license from Distrokid would help prove willful infringement. Also apparently implicated is Engel v Wild Oats.

(Distrokid may want to clarify this is actually the case as certain alternatives could… well let’s just say there might be a lifeboat for one situation).

“Defendants have engaged in a pattern of racketeering activity, as defined in 18 U.S.C. § 1961(5), through the repeated, relentless, and purposeful theft of the IP of others”

The Racketeering Influenced and Corrupt Organizations Act doesn’t just apply to mafia-type organizations. And you don’t have to be a mobster to be charged with racketeering. Any company can get charged if greedy and stupid enough to engage in  (for instance) the repeated, relentless and purposeful theft of the IP of others. In fact, it would seem to be easier to prosecute a corporation, than say someone in the mob, because everyone involved in the corporation has helpfully identified themselves publicly as a member of the organization on LinkedIn. Proving membership is usually the hardest part. Not in this case.

Pattern of racketeering activity?  Two acts of infringement within 10 years of passage of the act? I’d guess we have millions here. Maybe in a single week. And as I demonstrated earlier it’s not like TikTok doesn’t know they need licenses. They’ve entered into licenses with some creators. Wilful infringement.

DECEPTION AT THE HIGHEST LEVELS?

I’d argue at the highest levels of the company executives are engaged in an elaborate ruse to mislead rightsholders about the nature of the infringement.

The TikTok website refers copyright complaints to a process that looks exactly like the DMCA notice and takedown process. But according to US law that process is reserved only for user-uploaded content. It is not for copyrighted work that TikTok is distributing themselves.

I found a few high level executives at TikTok on LinkedIn.  I sent a similar message to several executives. The message read in part:

I am the artist’s rights advocate David Lowery. I’m the songwriter that originally launched the successful class-action lawsuit against Spotify in the US. Any idea how music I control ends up on TikTok? I can’t seem to track down the licenses. Further, if my analysis is correct the way your app appears to work, it looks like your company makes infringing copies before the user adds content. This would mean TikTok can’t claim DMCA safe harbor…

I explain in this article the actions that should be taken going forward:

See here: https://thetrichordist.com/2019/10/18/tiktok-nothing-says-chinese-state-influence-like-censorship-and-mass-copyright-infringement/

But my question is this? If you folks are making so much money now. Why not be a decent human being and license the music?

I received this response from

Thanks for reaching out. TikTok is an exciting way for songs and emerging artists to gain exposure and breakthrough with a wide and varied audience. As a platform for unique and original creative content, TikTok places high value and respect upon intellectual property rights. I would recommend to use the usual channels as this is the fastest way for you to get support. TikTok has copyright policies in place (see the respective website in your location) and copyright infringement notice procedures available to assist. The email address is copyright@tiktok.com. Please note that this is a private message and not a public statement. All the best, Joern

This may seem like a small thing. It isn’t.  It’s major misdirection. The high level executive is directing me towards the DMCA process. This financially benefits TikTok (the hypothetical RICO organization) Because most artists know this is a pointless whac-a-mole™️ routine. A game the artist knows they will never win. So they usually don’t even bother. So it’s material that the company points artists at this process. It gives the impression the users are responsible for the infringing copies. Yet TikTok is clearly making the infringing copies. If this isn’t fraud it should be.

Maybe legal staff and IP counsel at TikTok do not know how their service works. Exactly how the copying and distributing of music files occur on their service. But I don’t think so. The guy who sent me the email response was once the head of licensing for ICE. What is ICE? From the UK PRS for music website:

ICE is the result of a joint venture between PRS for Music, STIM and GEMA with the collective aim of developing the world’s first integrated music copyright, licensing and processing hub, encouraging copyright data accuracy, aggregation of repertoires for multi-territory licences and the elimination of parallel processing against incompatible worksdatabases.

So to consider this the head of content licensing at TikTok who is the former licensing chief for ICE doesn’t know the kind of licenses TikTok requires? Doesn’t know the service can’t rely on DMCA safe harbor process? I call bullshit. Further I suspect this executives knew he was misdirecting me.

I’d start by naming this guy as one of the conspirators and let him roll on everyone else.

Anyone else out there want to join me in a complaint to a US Attorney?

This is unacceptable and criminal behavior. It should not be tolerated from an American company much less a “sharp power” arm of a authoritarian foreign government.

 

 

 

 

 

 

 

 

 

 

 

 

Company Appealing Canadian Site Blocking Ruling Uses Open Media Spambot Tools

Many readers of our blog know the story of the Google proxy Open Media, their subsidiary New/Mode and the spamming of the European Parliament during the debate over the Copyright Directive.  If you are not familiar with the story here are two excellent pieces:

https://www.thetimes.co.uk/article/google-funds-activist-site-that-pushes-its-views-rg2g5cr6t  (a good summary).

https://www.faz.net/aktuell/feuilleton/medien/eu-and-copyright-anatomy-of-a-political-hacking-15771185.html (long but very thorough).

Today Hugh Stephens published an excellent blog on the GoldTV site-blocking case in Canada. I wasn’t aware of the case but Hugh’s opening paragraph is a good summary.

“Last week I wrote about the ground-breaking Federal Court decision that granted the request from Rogers Media, Bell Media and GroupeTVA to issue an injunction requiring Canadian ISPs to block pirated streaming content from offshore content provider GoldTV. This is the first such “site-blocking” order issued in Canada, although such orders are relatively commonplace in a number of other jurisdictions. The order was unopposed by all respondents in the case, which included all of Canada’s major ISPs, and some smaller ones, with the exception of Teksavvy, a small reseller of ISP access based in southern Ontario. Ten days after the order was issued, Teksavvy filed an appeal.”

Teksavvy is a small ISP and has an “net activist” sort of flavor.  They proudly claim to be fighting cable and internet monopolies. As they proclaim on their website:

Good for them.

But anyone who has looked at enough Google proxy websites will note there is something familiar about the style of this website.  Curious I switched to developer view and started searching the code for signs of Open Media et voilà!

A nice little call to action box powered by New/Mode.

I have no idea what this means, but of all the web tools out there for them to use they decide to use a Google proxy?  A disgraced and “outed” Google proxy?  Draw your own conclusions.

MLC Will Leave No Space Rock Unturned In Search For Songwriter Royalties

Our sister blog Artists’ Rights Watch just posted a new blog about one of the companies the MLC board has selected as a “digital vendor.” The company ConsenSYS will help match songwriters to royalties. The company also has an asteroid mining subsidiary.  I swear to god I did not make that up.  But hey maybe they are on to something. Maybe that’s where all those unpaid royalties are! Floating around in the asteroid belt!  Read more below:

“MLC Pick ConsenSys Looking to Asteroid Mining, Fixing Employee Stock Mess, Will It Vanish Into the Ether? — Artist Rights Watch”

 

 

“There’s a sucker born every minute.” ― P.T. Barnum According to MusicRow: Technology company ConsenSys and mechanical licensing administrator Harry Fox Agency (HFA) received unanimous approval from the MLC Board to become the primary vendors responsible for managing the matching of digital uses to musical works, distributing mechanical royalties, and onboarding songwriters, composers, lyricists, and […]

via MLC Pick ConsenSys Looking to Asteroid Mining, Fixing Employee Stock Mess, Will It Vanish Into the Ether? — Artist Rights Watch

National Security Arrest Puts Scrutiny on MLC Vendor ConsenSys and Contract Award Process

 

A friend that has long been involved in the technology startup world refers to any and all cryptocurrencies as “LaunderCoin.”  The point being that some significant portion of cryptocurrency activity is simply money laundering.   So it was no surprise when I saw the headline above come across my newsfeed.  Yawn.

A few paragraphs in though I nearly spit out my coffee.  This isn’t any old cryptocurrency expert this is the Ethereum Foundation’s “research scientist” Virgil Griffith.   Griffith is a well-known internet radical. The NY Times called once called him a “cult hacker.”  “Internet zealot” might be a better description.

From the press release accompanying the complaint:

“As alleged, Virgil Griffith provided highly technical information to North Korea, knowing that this information could be used to help North Korea launder money and evade sanctions.  In allegedly doing so, Griffith jeopardized the sanctions that both Congress and the president have enacted to place maximum pressure on North Korea’s dangerous regime.”

Assistant Attorney General John Demers said:  “Despite receiving warnings not to go, Griffith allegedly traveled to one of the United States’ foremost adversaries, North Korea, where he taught his audience how to use blockchain technology to evade sanctions.  By this complaint, we begin the process of seeking justice for such conduct.

 

So what does this have to do with the new Music Licensing Collective?  Well one of the two digital vendors announced by the MLC is ConsenSys.  ConsenSys is headed by Joseph Lublin who is the co-founder of Ethereum and COO of Ethereum Foundation. In 2014 Joseph Lubin described The Ethereum Foundation as a  Canadian non-profit that “makes sure the Ethereum infrastructure run fairly and independently.  However, a search of Canadian Government records shows no such non-profit or charity is registered in Canada under that name.

Even more confusing, the Swiss tax authorities have a non-profit Ethernet Foundation registered in Zug Switzerland where Lubin’s for-profit company is registered. And there are multiple and contradictory reports as to Lubin’s role in these various entities.

While it is unclear if Lubin or any entity that he directs is involved in the sanctions violations, he is awfully close and could be questioned.  The US attorney is hinting at further arrests. The fact is the MLC board has somehow managed to put themselves awfully close to a national security investigation.  This is outrageous.  Where were the grownups?

We need real transparency and oversight of the MLC.   It’s probably time to have the Inspector General of the Library of Congress look into the award process.   First there was HFA, now North Korea?

 

 

MLC Selects as “Digital Services Provider” the Company that Sent Fraudulent License Notices to Songwriters

The picture above shows dozens of backdated “NOIs” for compulsory mechanical licenses sent to me by HFA in 2016.  By purporting to be valid NOIs for licenses when they were not, HFA committed mail fraud. 

Music Row is reporting the music licensing collective board of directors has selected HFA as a digital service provider:

Technology company ConsenSys and mechanical licensing administrator Harry Fox Agency(HFA) received unanimous approval from the MLC Board to become the primary vendors responsible for managing the matching of digital uses to musical works, distributing mechanical royalties, and onboarding songwriters, composers, lyricists, and music publishers and their catalogs to the database.

The problem is that HFA was the 3rd party licensing contractor hired by Spotify and other streaming services to obtain licenses from songwriters and publishers.  HFA did not properly do their job leaving streaming services exposed to massive copyright infringement lawsuits (from people like me).  They created the problem that led to the creation of the Music Licensing Collective so now they are rewarded with the contract to run the matching of musical works and paying artists?!?!  Didn’t they just fail spectacularly when asked by Spotify to do this job?  Didn’t the Spotify class action and the four other private lawsuits prove HFA incapable of doing the job?

Even worse, in order to attempt to cover up the mess, they sent me, many fraudulent “Notices of Intent” or NOIs that purported to execute the federal compulsory mechanical license. They were not valid as they were backdated to make it appear they had sent the notices before the songs were streamed.  I regret now that we didn’t pursue a RICO case against these folks when we were pursuing the copyright infringement cases against the streaming services.  (See the screenshots below.)

Here’s what the DOJ says about mail fraud.

940. 18 U.S.C. SECTION 1341—ELEMENTS OF MAIL FRAUD

“There are two elements in mail fraud: (1) having devised or intending to devise a scheme to defraud (or to perform specified fraudulent acts), and (2) use of the mail for the purpose of executing, or attempting to execute, the scheme (or specified fraudulent acts).” Schmuck v. United States, 489 U.S. 705, 721 n. 10 (1989); see also Pereira v. United States, 347 U.S. 1, 8 (1954) (“The elements of the offense of mail fraud under . . . § 1341 are (1) a scheme to defraud, and (2) the mailing of a letter, etc., for the purpose of executing the scheme.”); Laura A. Eilers & Harvey B. Silikovitz, Mail and Wire Fraud, 31 Am. Crim. L. Rev. 703, 704 (1994) (cases cited).

Oh and one more thing. HFA was the company that was supposed to pay these streaming royalties back out to the songwriters.  They didn’t do that either.  Where is that money? Shouldn’t the Copyright Office look into this?

This is a travesty.  The members of the MLC  and those that purport to represent songwriters (I’m looking at you NSAI, SONA) have some serious explaining to do to songwriters.   This company was one of the main reasons songwriters didn’t get their mechanicals for 7 going on 8 years.   What the fuck were you guys thinking?

 

 

 

 

Anonymous Comments from Startups/Songwriters on Open Letter for MLC/DLC Settlement

We’re getting comments on the settlement of the Mechanical Licensing Collective and Digital Licensee Coordinator (two lyrical titles for songwriter masters…NOT), proclaimed in their cozy proceeding at the Copyright Royalty Board.  David discussed in his open letter to the Copyright Royalty Judges released over the weekend.

There was nary a startup to be seen as part of this negotiation so not surprisingly, some of the comments we got are from startups and everyone is worried about retaliation so commented anonymously.  Here’s a sample from startups:

The fee imposed by the biggest tech companies in the world on their competition is $5,000 for 5,000 recordings but $60,000 for 5,001 recordings?  WTF?  I never asked for this. Why doesn’t Spotify just write the check instead of all this penny pinching?

This is US only and is going to totally screw up my MFN deals with the labels if I use the blanket license because I have to match each label with the “fee”?  Thanks lawyers!

They keep saying this is like SoundExchange it is nothing like it. First off the yearly fee!  SoundExchange protects small webcasters and helps competition with a level playing field so you dont have another big rights payment.  What a sh*t show.

How can there be no public comment?  If the government sets a fee, don’t they have to put it for public comments and show back up.  This is like the British East India company.

Why would I pay $60,000 for US only?  For streaming only?  I pay for the startup costs?  Why don’t they pay for my startup costs?  Google & big guys started this thing I never wanted it. Let them pay for it.

Still trying to understand how this helps me…

This is the first I heard about the whole thing and they want more money?

From songwriters:

No one believes this is going to launch on time now I believe it even less.

So let me see… $60,000 yearly fee will increase or decrease the number of services competing for my songs? I will take a wild guess and say decrease.

Still trying to be positive about MMA but it gets harder all the time

 

 

Open Letter to Copyright Royalty Judges on the MLC/DLC Settlement

I’m posting my letter to the Copyright Royalty Judges about the Mechanical Licensing Collective “voluntary settlement” with the DLC.  It may be voluntary for some people, but it was negotiated after shutting out everyone else from the negotiation on a technicality. Trichordist readers will probably be very interested in the issues and may want to send their own complaint to the Judges.

After delays for over a year that scared off any competition (whether or not intentionally), now they want to jam it through the Copyright Royalty Judges without a public comment from the people that will be most affected.  Bad move because the public will comment anyway.

I call bullshit.  Plus an astonishing attempt to deny the Judges the legitimate opportunity to hear new ideas that they might want to take into account in their decision.  It is THEIR decision after all.  We are not governed by unaccountable lobbyists.

You may have heard that the MLC and DLC have decided on how much the rich guys are going to pay the songwriters after forcing out any independent songwriter groups from having a voice in the “proceeding”.  That maneuver prevented the Copyright Royalty Judges from hearing from independent songwriters and of course startups were nowhere to be seen, no doubt scared to death from challenging the big boys who can snap their hopes like twigs. (That is an old story.  Remember the Microsoft anonymous amici who were too scared to reveal their identities to complain about Microsoft’s anticompetitive business practices?(

The Judges, who are supposed to now bless the settlement and turn it into law, have one more chance to hear from songwriters, publishers, and startups who will have to live with this thing. 

The Judges have the power to open the settlement to public comment so the Judges may take into account any views from songwriters and startups brave enough to challenge their “betters” before they rule on the closed door settlement.  We all know they will hear from us after, particularly since the settlement just happened to get announced before the December 9 “reply comment” deadline for the Copyright Office’s proposed rules on the MLC.  It would be best to send your comments on the settlement directly to the Copyright Royalty Judges at Crb@loc.gov since the Judges, not the Copyright Office, have the power to change the settlement for good cause and fundamental fairness.

Here is my letter to the Judges:

David C. Lowery

Dear Copyright Royalty Judges:

I have read the proposed settlement reached by the MLC and the DLC that was posted on the CRB site. Without commenting on the substance of the settlement, which has many, many holes, I respectfully wish to call the Judges attention to one particular section:

Adoption of the Settlement by the Copyright Royalty Judges

Pursuant to 17 U.S.C. § 115(d)(7)(D)(v):

In lieu of reaching their own determination based on evaluation of relevant data, the Copyright Royalty Judges shall approve and adopt a negotiated agreement to establish the amount and terms of the administrative assessment that has been agreed to by the mechanical licensing collective and the digital licensee coordinator… except that the Copyright Royalty Judges shall have the discretion to reject any such agreement for good cause shown. An administrative assessment adopted under this clause shall apply to all digital music providers and significant nonblanket licensees engaged in covered activities during the period the administrative assessment is in effect.


Importantly, the settlement of this Proceeding is not subject to public comment.
See id. (noting that the Participants are the parties that have to agree to settle this Proceeding); see also 37 CFR § 355.4(c)(4) (outlining procedure by which only other participants, and no others, may file comments on a proposed settlement within five days of the filing of a proposed settlement); Order Granting Joint Motion to Modify the Case Scheduling Order (setting the schedule for non-settling participants, and no others, to comment on any proposed settlement). The Participants are pleased to have reached the Settlement, which meets the statutory requirements of Section 115(d)(7)(D) for the initial Administrative Assessment.

This is outrageous.

First of all, I’m not a lawyer but when I read the authority these people cite for barring comments from the people who have to deal with the consequences of what they have negotiated, I don’t think the Judges are prohibited from taking comments from the public on the settlement. In fact, I find this paragraph to be extraordinarily self serving and makes me ask who do these people think they are?

The Judges should take into account that no startup has been present or able to negotiate the many burdens placed on them by this settlement. In particular, they have not been able to be heard by the Judges on the scope of these financial burdens that their competitors—some of the richest multinational corporations in history—have unilaterally decided to place on them with no push back.

This isn’t to say that any would be brave enough to come forward and challenge their betters if given a chance. But they should at least be given a chance.

Plus, the Judges need only take notice of some of the comments filed by songwriter organizations with the Copyright Office (Docket COLC-2019-0002) to read for themselves that many songwriters do not feel they have been represented in this proceeding. If that is not “good cause shown,” I don’t know what is.

Respectfully, I think it would be a grave, grave mistake and an unfixable miscarriage of justice, to deny the public the opportunity to comment on this settlement. Because the public will comment, maybe not in the proceeding but comment they will and for a very long time.

I hope the Judges will not miss this opportunity to exercise their legitimate oversight role for both the DLC and the MLC.

Sincerely,

David C. Lowery

Guest Post: MIC Coalition Filing Reveal: The Zombie Transparency in Music Licensing and Ownership Act–@ArtistRights Watch

By Chris Castle

Remember the horrific Transparency in Music Licensing and Ownership Act from the last Congress?  (See “The Transparency in Music Licensing and Ownership Act: The Domesday Book Meets A Unicorn“.)

Well, guess what–it’s not really dead!  A little tea-leaf reading suggests that the MIC Coalition (one of the largest and most anticompetitive lobbying groups in history) have plans to amend the Music Modernization Act’s blanket license to all licensing verticals if they had their way.  That would include “general licensing” in bars and restaurants to satisfy their hotel, restaurant and “beverage” folks.  So there’s definitely some there there.

 

MIC Coaltion Members 2019

MIC Coalition Members

The MIC Coalition cartel filed a comment with the Copyright Office that makes one thing clear–this rule making is going to be a scorched earth donnybrook of epic proportions.

The big reveal in the MIC Coaltion’s filing is based on this passage in the legislative history for the Music Modernization Act:

Testimony provided by Jim Griffin at the June 10, 2014 Committee hearing highlighted the need for more robust metadata to accompany the payment and distribution of music royalties. With millions of songs now available to subscribers worldwide, technology also has a role to play through digital fingerprinting of a sound recording. However, there is no reliable, public database to link sound recordings with their underlying musical works. Unmatched works routinely occur as a result of different spellings of artist names and song titles….Music metadata has more often been seen as a competitive advantage for the party that controls the database, rather than as a resource for building an industry on.

The entire concept of maintaining a static look up database of not only all songs in the history of recorded music, but also all sound recordings in the history of recorded music that can be queried in real time is really not that different than the Domesday Book–when William the Conquerer made a big list of all property, people and chickens in England in the “Great Survey” in 1086.  Like the Domesday Book, the “musical works database” will be full of mistakes due to the dynamic nature of the things it is purporting to count.

But the reveal is the heaping praise on the horrific Transparency in Music Licensing and Ownership Act which was designed to destroy the PRO system (just like the MIC Coalition):

In response to the Copyright Office recommendations, Representative Jim Sensenbrenner introduced the Transparency in Music Licensing and Ownership Act, H.R. 3350, in July of 2017, which was cosponsored by several members of the House Judiciary Committee. The bill would provide for a database, housed at and overseen by the U.S. Copyright Office, to aid businesses and establishments that publicly perform musical works and sound recordings in identifying and compensating the holders of rights in those works. 

Fasten your seatbelts, it’s going to be a bumpy night.

PRESS RELEASE: SoundExchange Updates Client Portal to Provide Faster Payments and Transparency

PRESS RELEASE


New Feature Introduces Self-Service Management for Overlapping Claims

WASHINGTON, DC – November 6, 2019 – SoundExchange today introduced a suite of new features to its online client portal, SoundExchange Direct (SXDirect), that provide music creators with increased control and transparency into their royalty accounts through greater self-service. The groundbreaking “Overlaps & Disputes” tool notifies rights owners when other parties make competing ownership claims, enabling them to resolve overlaps as they occur. The efficiencies provided in this tool will result in fewer royalties being held up by disputes and thus faster payments.

“We are committed to raising the bar for the industry by providing innovative solutions for music creators,” said Michael Huppe, CEO of SoundExchange. “Music creators deserve to be paid fairly and accurately, and these new capabilities ensure they receive their royalties faster, too.”

To date, SoundExchange has distributed more than $6 billion in royalties to music creators, including distributing nearly $1 billion in 2018 alone.

“SoundExchange empowers rights owners and their representatives by focusing on transparency and efficiency,” said Paul Smelt, Co-Founder and Director of Global Master Rights. “These major updates will provide greater insight into catalog usage and significantly improve the overlaps and disputes process, distinguishing SoundExchange as one of the most user-friendly collection management organizations in the world.”

The recent update significantly expands the tools available to rights owners, enabling them to manage overlapping claims and upload new sound recordings directly into the SXDirect portal:

  • Overlaps & Disputes: provides rights owners with instant notification when there are overlapping claims to a sound recording and provides them with the ability to maintain or relinquish claims using a dashboard in SXDirect.
  • Submit Recordings: provides rights owners with a dashboard in SXDirect where they can add new sound recordings by providing the International Standard Recording Code (ISRC) and related metadata. These new sound recordings receive immediate validation so that they can be immediately accepted into SoundExchange’s Repertoire Database and therefore become available to claim and associate rights.

“By introducing this portal update, SoundExchange is once again demonstrating they are the vanguard on transparency in the music industry. Combining this with their powerful new self-service features, empowers sound recording copyright owners to submit ISRCs, make new claims, and resolve overlaps faster to maximize their royalty streams with a spirit of collaboration,” said Rob Gruschke, Vice President of Global Collective Rights at Beggars Group Media.

Additional features were introduced that are available to all music creators who use the SXDirect portal:

  • Associated Recordings: provides a display of all sound recordings currently associated with the music creator’s account and the claim percentage for each track.
  • Search & Claim: provides a way to search SoundExchange’s complete database of sound recordings, which includes ISRCs provided by rights owners and tracks that have been reported to SoundExchange as played but have not yet been associated with a rights owner-provided ISRC.
  • Upload History: provides music creators with a history of files that have been uploaded to SXDirect. These files include “Search & Claim” carts or rights owner-submitted sound recordings.

“The targeted use of automation gives music creators greater control of their accounts through self-service.  In this way we ensure that the business of music keeps up with the pace of their creativity,” said Jonathan Bender, Chief Operating Officer at SoundExchange.

These updates are now available to all music creators who have SXDirect accounts. Account holders can learn how to use these features by reading a new series of posts published to SoundExchange’s blog.